Good day and welcome to the HUB24 first half FY 2024 results briefing. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. For operator assistance throughout the call, please press star zero . And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Andrew Alcock, Managing Director, to begin the conference. Andrew, over to you.
Good morning, everyone, and thank you very much for tuning in for our first half results for FY24. Welcome. It's a great half for us. Very pleasing to present on behalf of HUB24, as I say regularly. In summary, we've had some great flows. We've got a very strong outlook moving forward, a very strong pipeline, and some great awards to talk about. We're continuing to invest in our strategy to lead our industry moving forward. I quite often talk about empowering better financial futures and how we, as an industry participant, work with Advisers, fund managers, and other providers to help customers get a better outcome.
I'm very pleased to say that our focus on working with Advisers and accountants and supporting them to deliver efficient businesses, to help them with their own scale, to lower the cost of advice or provide access to further customers, is resonating with some of the awards and recognitions we've got and some of the numbers that will go through in the pack this morning. And nicely, I wanted to also say that we are in market with a More Power to You campaign, which actually helps explain to Advisers or helps advocate for how we do actually help them empower better financial futures together with their clients. And we're doing that in trade press and so forth to sing the song about HUB24's leading differentiators that will help Advisers achieve their goals and hopefully help us together build a better industry and better outcomes for consumers.
If we look at what's been a great half, particularly in the last week, we've had a good time as well. We won five awards from Investment Trends last Tuesday, very pleasingly, which is testament to our market leadership and how we are focused on delivering to Advisers and their clients. And these surveys are based on the important factors that Advisers weight as in provide weighting to as important factors for their business and for their business growth to meet their customer needs. So we won Best Overall Platform for the second year running for HUB24, and that's a scientific scored survey. Very pleased with that. And we also reclaimed our Best Managed Accounts functionality, having lost it last year but been the winner for about six or seven years.
Very pleased with that as well because that's part of the core of our heritage and part of the core of our differentiators as well. Pleasingly, also in that survey last week, we won three other awards: Best in Reporting, Best in Online Business Management, and Best Mobile Platform. Later on in the pack, I'll outline 23 different areas where we've either won an award or been ranked first place before I hand over to Kitrina Shanahan, who's with me today. Kitrina will be outlining our financials shortly. Now, onto the numbers. In terms of the business, if you look at the total FUA at the bottom left of the slide here, we're at AUD 91.2 billion. Our platform FUA was AUD 72.4 billion as at 31 December, and as we stand at 15th February, AUD 74.8 billion. I'll let Kitrina unpack that.
There's obviously good, strong inflows and market movement in there as well. Interestingly, our net inflows for the first half are AUD 7.2 billion, which is a record. And that's partly driven by great organic flows but also the one-off large migration of AUD 1.8 billion from an Insignia incumbent provider to HUB24. As you'd know, we're working on transition or a large transition opportunity for Equity Trustees, which could be up to AUD 3.5 billion-$4 billion this half. So when you add that to our organic profile, it looks like for this year, we could be heading to AUD 15-$16 billion of net flows for HUB24 and FY24 should that EQT transition deliver and our organic flows continue. That's an amazing outlook to be looking at. We're very focused on that as a business.
Of course, we're investing to deliver that with people and so forth and to make sure we can actually deliver that robustly and deliver great service. If you look at the numbers from a PCP perspective, revenue across the group, platform, and tech solutions, all up: group revenue AUD 157 million, platform AUD 120 million. A great result when you consider that part of our result had a lower well, the PCP period had a lower cash spread as previously advised. And Kitrina will unpack the impact of that on our margins later. So great results given that headwind there. Our underlying EBITDA are also up, AUD 55 million for total group and AUD 48 million for platform and tech solutions, just slightly down. There's an investment there in data infrastructure to support the integration of myprosperity and our future strategies we talk about. And Kitrina will chat about that as well.
But these are great EBITDA results or underlying EBITDA results when you consider the investment in myprosperity and the investment in our staff and our people for the growth that's coming, as I said, with that AUD 16 billion expected this year in terms of net flows, which would be absolutely a record for us and something that our industry has not seen for a very, very long time. In terms of our stats, NPAT up 39% at 21.5%, underlying NPAT up 14% at 30.4%, interim dividend up 32% on PCP at 8.5%. Very pleased with that. And our underlying EPS is also up as well. So Kitrina will take a deeper dive into these results. But as a headline, fantastic results for first half 2024 in a period where we've been investing for growth.
We've got the impact of myprosperity and the impact of that cash lower spread that's coming through this half and should be stable from then on. Having said that, we like to do this with a track record. We have a consistent track record in terms of delivery. And the slide we've got here is articulating our four-year CAGR of FUA at 54%, our group revenue CAGR at 31%, and group underlying EBITDA at 48%. So we do aim to run the business with ongoing growth and expanding margins. We balance the accelerator and the brake in terms of investing and/or delivering margins. We're not shy to invest because we believe there's a great opportunity for our business moving ahead. But the story here is it's been consistent growth and reliable growth for us. And we'll talk about some of those patterns of Adviser flows on later slides.
On the right-hand side, you can see the tech solutions revenue there from 1H23, including Class, and of course, the drop-off for the licensee revenue from 1H21 there as well in the trends. Absolutely great results and consistent. We aim to continue to deliver that way. If we turn to some of the business highlights for the half, interestingly, on the right-hand side of this slide, of course, we're number one for net inflows to September 2023 and quarterly inflows according to Plan For Life research. That being said, we're also number one for superannuation inflows in platforms. Great result for HUB24. Ranked number one as best platform and having the best flows on a 12-month basis in the platform and particularly across superannuation.
Really interestingly, the third step there on the slide, across all superannuation funds now, I'm talking about not just platforms or retail funds. I'm talking about industry funds and corporate funds. Across all superannuation funds in the nation, we have the second-highest level of switching or choice into our fund out of other funds and outstanding result. I think it's behind AustralianSuper only. It demonstrates the power of advice, which we believe in. It demonstrates the industry that we're in and that those who are seeking advice from Advisers are choosing HUB24. And we're seeing more switching into our products than many, many others. And we're number four overall for net inflows across all super funds, again, including industry funds. A great result for our business. Turning to some of the anecdotes or matters to mention for the half, we've talked about the strong FUA growth at our AGM.
We also talked about having launched HUB24 Discover, a cost-effective, streamlined managed account portfolio platform. It's had a strong uptake to date. There's close to 200 accounts in Discover at the moment. And that's a great result. And it's actually in our target space that we aimed. It's all the average balance is lower than the rest of the platform's average balance. So it seems to be a well-positioned product, but early days, having been launched probably six weeks ago and having Christmas in the middle. Equity Trustees migration, as I mentioned earlier, is on track. In the next few weeks, we should see the first results of that all going well. And also in our Class business, delighted to have market-leading NPS and receiving some industry awards there and seeing the growth in Class and NowInfinity and others there as well.
You would be aware if you'd followed the AGM. We also launched new product features in the high-net-worth space. I'll take a deep dive into that a little bit later on. Our myprosperity business is going really well with increase in households on board and some enterprise licensing model launch, which are really exciting. Of course, as always, we're investing in tomorrow, building market-leading data infrastructure, which really leverages the group's capabilities to help us build on our strategy. We're getting to the final stages of the Xplore integration, which is very pleasing as well. With respect to market share, in terms of the market share gains, HUB24 has grown our market share from roughly 1% five years ago to 7% today, which is a great result.
When you consider the flow patterns we've got in terms of net inflows being the largest in the industry and the rankings we've got at 6% market share, there's a lot of runway to grow and increase in size quite substantially. On the right-hand side, if you look at, we're ranked number one for organic market share gains over one and three years. The slides there are indicating the three platforms in growth stage and where we're at. If you actually add back the inorganic flows for years three and year five there, we're ahead of the pack as well. So really doing well in terms of organic market growth and acquisition market growth. These are great results across our business, across the main platform business as well, with a strong and growing customer base, which gives rise to these results.
If we have a look at that growing customer base that drives that outcome on the next slide, in terms of Advisers, today, 28% of the Adviser market is using HUB24 in some way, up from 5% in first half FY2019. So great result there. There's a CAGR in Advisers using the HUB, five-year compound annual growth rate of 24%. The average balance we have from Advisers is also growing, which I'll detail in the next slide a little bit further. So the average balance there, you can see on the slide, that's the blue bar chart, up to about AUD 17 million, up from hovering around AUD 5 million, AUD 6 million, AUD 7 million from 2019 and 2020 up to that result, so demonstrating that we're actually getting more share of wallet, if you like, of our customers at the same time as growing the customer base.
We're ranked number one for organic net inflows to September 2023, the 12-month period there at AUD 10 billion. And we're in the top three over one, three, and five years as well. So let's unpack the Adviser base and the flow trends and outline the significant runway for our organic growth in the future on the next slide. On the left-hand side, you can see the breakdown of flows from different cohorts of Advisers, being new Adviser relationships or new licensee relationships, existing licensees where new Advisers have chosen to use us in that financial period, and existing Adviser relationships. We have ongoing reliable flows year- on- year from existing relationships. We're also opening up the door with new Advisers inside a licensee that we work with and also new Advisers as well, which means we've got reliable ongoing flows from our business that compound over time.
The first half 2024 is there on the right-hand side of that chart. That's the AUD 7.2 billion we talked about. I'd imagine the 11% there from existing licensees but new Advisers will tick up as the year progresses because we're only through the first half. Having said that, if you look at the overall industry, there's 15,500 Advisers in the marketplace. We have access to about 7,500 of them with licensee agreements with AFSL holders in the country. That's about 48% of the market. Of that 7,500 that we have access to with existing agreements and we do sign new agreements all the time, I think we signed quite a number up in the first half. I think it was about 70. If I'm incorrect, someone will correct me in the first half.
Of that 7,500 that we have access to, 4,300 are actively or have actively used HUB to date. So a long runway that we could get to moving ahead, a latent opportunity, if you like, there. Mature platforms may have a higher share of balance or share of book of each Adviser. Our business is growing. We're actually seeing that average increase from AUD 8 million per Adviser in FY 2020 up to AUD 17 million, so doubling our share of wallet. That's because of the newness of our book, the type of Advisers we've got. We're in a growth mode. Some others with higher balances per customer are actually shrinking or suffering market outflows. That demonstrates where we can get to and the opportunity ahead of us. Our calcs are the industry average is AUD 62 million per Adviser. As I said, our average is at AUD 17 million.
A long way to go if you get half or three-quarters of an Adviser's book. Interestingly, to show the ability for us to get greater penetration, 9% and I think it's up from 7% or 8% last time we reported, 9% of Advisers using the platform have more than AUD 50 million on HUB24 looking after their clients. As I said, the Adviser relationships deliver flows typically up to about six years before you get to a steady state of flow from Advisers. So a significant growth opportunity in our business remaining from existing and new Advisers. You can see that the stats are changing half-on-half in terms of that level of share of wallet and penetration. Really excited that we reclaimed our managed portfolio leadership position with best managed accounts, the number one for overall satisfaction.
In terms of Adviser demand for managed portfolios, that's at 56%, up from 30% in 2018. We have AUD 32.7 billion and 18% market share in that market. It's a key differentiator for us. We've won the award about 6x or 7x . It is playing to the sweet spot of Adviser growth and some of the things that set us apart on the left-hand side, our leading tax optimization. We do in-house trades, efficient portfolio implementation for managers, and most recently, having launched Discover, which is a streamlined, simple, cost-effective, simple fee-structured product for those starting out or simpler needs, being able to take that managed portfolio capability to a part of the market where there's an opportunity where we haven't grown as much as we'd like for those who are starting out and working well, as I said, with about 200 accounts in that product already to date.
If we have a look at some of our other businesses quickly beyond the platform, myprosperity has done really well. We're up about 20% or 12,000 households since we bought the business in April 2023. There's about 20 new wealth practices using the business, up to about 460. Great market-leading, secure client portal technology playing to great collaboration between Advisers, accountants, and their clients, a safe place to store your data, your financial plans, almost a vault that's cybersecure rather than sending emails around the industry. It really is resonating in terms of the current offer with licensees and Advisers and accountants. We've actually got great engagement underway with large groups who are looking at the cyber and the secure and the security and the efficient way of doing business and have asked us for enterprise software licensing models. We've got that underway.
There's one group already rolling that out to customers. Great result for us. I think that as we move forward, as we integrate myprosperity better with our group's other products, it will be a driver of flows but a driver of change in the industry, creating efficiency and lowering the cost of advice. We're also prototyping a new Class client portal, leveraging myprosperity as well right now as we speak. Fantastic. We're heading with the investment there. We've got the growth coming through and a great result. Turning to Class and NowInfinity, once again, consistent growth in those businesses, Class market share at 30.4%, more than 200,000 accounts now, and 650,000 companies on Corporate Messenger.
So Class providing great diversified customer base, a footprint for expansion for the group, leading in its own space and winning its own awards as well, but also helping us with our platform of the future strategy. In fact, we're starting to leverage Class portfolio data capabilities to support our whole of wealth view and integration of solutions for different customer segments. And the continued focus on customer service excellence, as I said earlier, has led to Class getting great customer engagement and market-leading Net Promoter Score s. So good results there, reliable results there, and also feeding into our strategy. I've got one more slide before I hand over to Kitrina Shanahan. And I won't spend much time on it.
But as I said earlier, our overall industry recognition, the current awards or first-place rankings there on the slide, in addition to the Investment Trends pieces I mentioned earlier, in their Adviser Technology Needs Report, we've got some other rankings there, primary advocacy, MPS, tax, and so forth, clean sweep in Adviser Ratings for the platform, also for Wealth Insights , and awards for our platform being the SMSF Advice Platform or Advisor Choice Platform, and Class as well being SMSF Software Provider of the Year and having the highest Net Promoter Score for both Class and NowInfinity. It really is a delight to work with a fantastic team, great customers, and great industry participants to lead and get great recognition for what we're doing, which is really about changing the way wealth works in the country, leading transformation, and empowering better futures for our clients.
Kitrina, over to you for financials.
Excellent. Thank you, Andrew. Just moving to the first financial slide, here we have a group snapshot breaking out the groups, the platform, and the tech solutions segments for revenue, underlying EBITDA, and the customer base. As Andrew called out, you can see that the group's revenue was AUD 156.7 million for the half with underlying EBITDA of AUD 55 million for the half. Platform is driving 77% of the revenue, and tech solutions is driving 22% with the corporate, including our investment in Diverger and other interests here as 1%. In the platform segment, we have just under 4,300 active Advisers using the platform. We've grown revenue to AUD 120 million, and we've also grown the underlying EBITDA to AUD 47.9 million.
The custody platform is clearly the largest part of that segment, with 96% of the revenue coming from the custody part of the business. And included within the other segment of 4%, we have the non-custody solutions and the myprosperity included this time for the first half. Tech solutions, we have revenue of AUD 34.8 million for the half and underlying EBITDA of AUD 10.1 million. And there are just over 6,000 financial professionals who are using the Class and the HUBconnect solutions. So then moving on to the next slides to go into a bit more detail on the group, the platform, and the tech solution segment, the next slide, we have the group financials. So here you can see that we've increased the operating revenue up 14% to AUD 156.7 million. We've also increased operating expenses 16% to just under AUD 102 million.
I'll talk more about operating expenses when we get later in the pack. We've also grown the underlying EBITDA to AUD 55 million, which is up 10% on first half 2023. Underlying EBITDA margin is 35.1% for this half, which is down 1.1% on first half 2023. This is largely driven by the investment in our people and higher FTE, FTE having grown to just under 900. We've also got lower vacancy rates in the first half 2024, which is more of an industry and broader Australia phenomenon. As I mentioned earlier, I'll talk more about the expenses a bit later. The group's revenue growing to AUD 156.7 million. Platform on the right-hand side, you can see platforms delivered AUD 17 million of growth in the revenue, and tech solutions has delivered AUD 1.4 million growth in revenue.
Then when you look at the underlying EBITDA, platform has delivered AUD 6.5 million growth in underlying EBITDA. The tech solutions segment is down AUD 0.4 million in underlying EBITDA. Included in that is AUD 1 million worth of investment in our data strategy, which is using the HUBconnect data tech and the data solutions, which I'll talk about when we get to the tech solution slide. On the bottom left-hand side of the slide, you can see again the fully franked interim dividend of AUD 0.185, which is up 32% on first half 2023, and the underlying earnings per share up 12% to AUD 0.362 per share. Moving to the next slide, here we've got more details on the financial results. You can see the strong growth in the platform FUA, which is up 30% to AUD 72.4 billion.
And the non-custody PARS FUA is up 9% to AUD 18.8 billion, which brings the total FUA to just under AUD 91 billion, up 25% on first half 2023. This also includes the industry-leading net inflows of AUD 7.2 billion, which includes the AUD 1.8 billion for the large migration. We've also got an underlying EBITDA margin for the platform of just under 40% to 39.9%, which is broadly flat to first half 2023, which was just over 40% of 40.3% first half 2023. Then on the right-hand side, you can actually see the breakdown from the movement in the FUA for both the custody and the non-custody, with the platform market also adding AUD 2.5 billion from the growth in the market in addition to the AUD 7.2 billion of net flows for this half. Moving to the next slide, we have the trend. So we have a trend here for the financial platform.
We have the underlying EBITDA margin and the underlying EBITDA. So first half 2022, underlying EBITDA margin was 38.8%. It's remained relatively steady over the last five halves, up to 39.9% in the first half 2024. Underlying EBITDA has grown from AUD 30 million back in first half 2022 to AUD 47.9 million in first half 2024. When you compare the first half 2024 to the first half 2023, there was a change in the ADI deposit spreads. So the HUB24 ADI contract changed back in December 2022, which meant that the first half 2023, the PCP that we're comparing to, had five months of higher ADI deposit spreads compared to both the second half 2023 and the first half 2024. In addition to the lower deposit spreads, we've also got lower employee vacancy rates within the platform segment, and we've also included the myprosperity for the first half.
So when we look at the performance of the underlying EBITDA margin remaining broadly flat and then the underlying EBITDA margin, the underlying EBITDA growing from AUD 30 million back in first half 2022 to AUD 47.9 million in first half 2024, we're really pleased with the benefits from the scale and the automation and the fact that that offsets the investment in the growth and the trend in the deposit spreads across the industry. Then if we move on to the next slide, we've got a bit more detail on the platform custody revenue and the revenue margin. On the right-hand side, you can see the six-year trend for the platform custody and the revenue margin with the revenue continuing to scale in line with the custody FUA.
Over the last 12 months, we had AUD 7.2 billion in the first half 2024 of net flows and AUD 4 billion in second half 2024, which is AUD 11.2 billion over the last 12 months leading into 31st of December 2023. You can see that in the graph on the right-hand side, that growth in the FUA coming from those net flows. On the bottom right-hand side, we've also got a chart from first half 2023 to second half 2023 and then to first half 2024 for the custody revenue margin. So the margin has held flat from second half 2023 to first half 2024 with 0.5 basis point of normal tiering and capping coming through for the admin fees. Then that's been offset by an increase in cash and trading with higher trading volumes being the main driver of that 0.5 basis point in the cash and other.
The drop from first half 2023, 37 basis points down to 35 basis points in second half 2023 and first half 2024 is largely to do with the change in the ADI deposit contract that I was talking about. Then moving on to the next slide, we'll just finish off on the platform segment. So here we've got the composition of the platform FUA and the platform revenue. On the right-hand side, you can see in the donuts for first half 2024, the retail portfolio was 85% of the custody FUA and the institutional portfolio was 15%. The institutional part of the portfolio includes the AUD 1.8 billion of large migration that we had in this half.
The fact that it's held flat, 15% first half 2023 to first half 2024, implies that the retail net flows remain strong and are driving a large part of those net flows, which has kept the portfolio mix consistent year- on- year. Then on the bottom right-hand side, you can see the custody revenue margin over the last three halves split between the retail and the institutional. This correlates to the previous slide where we were talking about the overall custody margin of 35 basis points in second half 2023 and first half 2024, with both retail holding flat at 38 and institutional broadly flat, 14 in second half 2023 and 13 basis points in first half 2024. And again, first half 2023, the reason for the drop between 37 and 35 is to do with the change in the ADI deposit spread.
Just another call out here is that myprosperity, there was an underlying EBITDA loss of AUD 0.5 million in the first half 2024. Over the full year 2024, we're expecting an underlying EBITDA loss of AUD 1.5 million given the startup nature of that part of the business. But as Andrew mentioned, we're really very pleased with the pipeline and how that part of the business performed post the acquisition. Moving on to the tech solutions slide, you can see that the Class accounts have grown 3% to just under 204,000. We're currently at 203,860 accounts, which includes the SMSF portfolio, the trust, and the portfolio subscriptions. The document part of the Class business has grown 2% to just over 182,000 clients. And companies using Corporate Messenger have grown 12% to just under.
100,000 customers using that part of the portfolio.
Revenue for tech solutions, which includes both Class and HUBconnect, is just under AUD 35 million at AUD 34.8 million, up 4% year-on-year. Operating expenses are up 8%, which includes the inflation for salaries and the lower vacancy rates that we've called out. Then the underlying EBITDA margin is AUD 10.1 million. On the right-hand side, you can see the strategic investment that we've called out there for AUD 1 million, which includes machine learning capability, which is driving efficiency and risk indicators for Adviser reporting. It's also included in account-level dashboards for KRIs, which drive insights for Advisers and licensees. There's also alerts and escalation reporting engine that we've delivered all part of that AUD 1 million, which is driving efficiency and advocacy onto the HUB24 platform. So again, we're pleased with that part of the portfolio and with the performance of that investment.
We're really pleased with the uptake of that, and that's also supporting the momentum that we can see in the platform out of the business. So then moving on to the next slide, we've got the group expenses and margins. So group expenses are up 17% for notable items. Notable items, you can see on the right-hand side of the graph, is AUD 12.6 million. That includes acquisition amortization for the Xplore, the Ord Minnett, and the Class acquisitions. It also includes between AUD 4 million and AUD 5 million for part of the Xplore integration and for the large migrations, one that we've completed this half, but also the portfolio that you can see that is due to come in over the second half 2024 and complete the first half 2025. Additionally, in the expenses, the four notable items, you'll see it's AUD 98.7 million, growing 17% to AUD 115.5 million.
The employee-related cost is the largest increase of just over AUD 10 million. That includes salary increases, an uptick in FTE. FTE is now 883. It was 736 FTE back in first half 2023. It was also 800 and I think it was 838 in second half 2023. The FTE increase includes both growth for this half, the AUD 7.2 billion of net inflows we've brought in in this half, and we've also investing for the huge net flows that we're expecting in the second half and the pipeline that we're seeing come through. Then again, also in some of our corporate areas, strengthening our risk and compliance and our HR functions. You can see in the bottom graph, the underlying EBITDA margin, it's gone from 36.4% in first half 2022, 36.2% first half 2023, and then down to 35.1%.
In that graph, we've highlighted in a separate color in the blue, had it not been for the change in the deposit spread, we actually would have grown the underlying EBITDA margin 50/50. So that blue box is really trying to highlight, actually, if we'd excluded that change, what would the growth outlook have looked like. So then moving on to the next slide, here we've got a wrap of the different profitability measures. So we've got underlying EBITDA of AUD 55 million, which was up 10% on first half 2023. We've then got AUD 5.8 million of share-based payments, AUD 6.9 million of normal depreciation and amortization, which excludes the acquisition amortization. We've then got interest expenses of AUD 1.1 million on the company's borrowings and then tax of AUD 10.8 million, which takes us to underlying NPAT of AUD 30.4 million, which is up 14% on first half 2023.
Then we've got AUD 4.6 million for the Xplore integration and the large migrations, AUD 8 million for the acquisition amortization, and tax deducted on those expenses, taking us to statutory NPATs of 21.5%, which is up 39% year-over-year. Then if we move to the final slide, we have on the final slide, just a reminder of the strong capital management with AUD 61 million of cash on the balance sheet giving us flexibility for future growth and other initiatives that we're looking at or could be looking at. We announced a share buyback back in August. We've completed 10 million to date. We've got AUD 40 million that we're intending to complete before September 2024, which is within 12 months of announcing the buyback.
We've also got on the right-hand side, you can see the underlying earnings per share growth over the last four years, CAGR of 43%, and a dividend four-year CAGR of 52%. So very pleased with the capital management and the strong performance that we're delivering. So with that, I will hand back to Andrew to finalize on the strategy and outlook.
Thank you, Kitrina. Folks, I'm going to do this fairly quickly, conscious that we want to leave time for questions and some of the content you've seen before. Starting with some of the trends we have in the marketplace, there's an absolute significant demand for professional advice. We hear about it in the newspapers. We have the government talking about it, both sides of government talking about it. We've got QAR opening that up in terms of creating advice opportunities for super funds and banks and others. We see that as a good incubator for our business because we're absolutely committed to advice and accounting, helping customers with their needs. In the marketplace, you've got the rise of new advice models. We've been through the disruption or the shift through vertical integrated businesses in this country moving to self-licensed and other licensee models.
You've got really the rise of boutiques and large aggregation groups, either backed by PE or others, starting to rise in the marketplace. Great opportunity for us. We work very closely with those groups with our key accounts functions. There is an emergence of advice networks, which is creating an opportunity for us to distribute our products, but also to help with those businesses with efficiency and compliance. In some cases, they're building multidisciplinary businesses, which combine financial advice and accounting, dealing with the needs of customers. Interestingly, we have relationships on the slide on the left-hand side with about 6,000 accountants through our Class business and just over 15,000 advising in Australia. We've got 76% of the market relationships there as well.
That demand for advice in Australia. There's 29% of unadvised Australians seeking advice, and 2.5 million retirees expected to transition retirement in the next 10 years, which absolutely, given the social imperative of our country and self-funded retirement, is going to need help and assistance given complexity and the opportunities to preserve and maintain and grow wealth even. There's also an intergenerational wealth transfer I'll show you on the next slide into some of the phases. So we're really dealing with our business investing on how we can help Advisers become more efficient, service more clients, more than the 120 on average they see now. And there are staff shortages in the industry. So data, products, and efficiency are key to helping our industry. And we're absolutely focused on that with our investment profile. And there's great demand and opportunities for us.
As I said, the demand is there for more and more people to seek advice. Turning to the life cycle stage slide, which we showed also last time I spoke to you at our AGM, the population shifts are continuing. If you like, there's the millennials rising up who are going from starting out to accumulating wealth. There's certainly an aging population where people are looking for certainty and looking to manage longevity and the risk of sequencing or the risk of running out of money in retirement. There's also the government agenda in terms of changing the regs and the caps and so forth. The intergenerational transfer of people as they pass on their wealth to their beneficiaries, inheritance and tax planning and so forth and downsizing. That's the trend of the marketplace. The demographics are shifting.
Of course, there's simple and complex customer needs representatively accessed there. You can see some of the stats about the population. We're absolutely planning our business and thinking about that and how we broaden out our residents or services and products across those groups, but also helping with that transition and providing, hopefully, an end-to-end solution that allows people to transition through life stages. If we go to the next slide, so how do we approach this and what are the strategies and offerings for investment we've got? Well, at the start of it, our approach is to lead today with our current platform offers, and we certainly have been with the awards. It's about delivering customer value and growth with our current product range.
But it's also about creating tomorrow and thinking about those demographic shifts, what the market's going to require, how we can help transform the market and build solutions that deal to those demand gaps and efficiency gaps and really leverage technology. I quite often say, "We're not done yet. There's more to do to create efficiency and better outcomes for customers." And why not? If technology can create better outcomes for consumers, we're absolutely going to do that. And we're also, as part of our third leg of that strategy, wanting to work across the industry to shape the future of the wealth industry as those shifts occur.
At the heart of that, if you look at the graphic in the middle, HUB has four market-leading business areas or product ranges being the platform in the bottom right, our data and infrastructure capabilities, software and applications being Class, NowInfinity, and also myprosperity being a client experience portal. Those components together, working with the outside of that ring being external third parties or others in the industry or other processes, is allowing us to play to how do we build better solutions, more integrated for client experience, leveraging data and so forth to get the outcomes on the right-hand side. Single view of wealth, one way of doing business, efficiency, flexibility, and great insights. That's the heart of our strategy and our approach, is to continue to lead today but to leverage the great assets we've got and to build solutions for the future.
But turning the page, you can see an overlay of some of the product solutions we've got in our platform business across those different demographics. And we've been gradually extending our reach to meet different client needs across their life stages. With HUB24 Discover, they're helping those starting out or helping those winding down with the need for simpler needs. Correction to earlier, the stat I had earlier was about 170 accounts. I've just got a stat from this morning. There's 260 HUB24 Discover accounts, which is a great result for us given the short period of time it's been launched. And moving up the scale there, you've also got other products like SMSF Access, which deals to more complex needs, up to wholesale discretionary accounts.
So we really are trying to provide solutions leveraging our manufacturing capability across different life stages, different balances and needs for complexity, and different client or market segments, if you like. We did talk about Discover a bit at the AGM today. We'd like to talk a bit more about our high-net-worth capability and where we are with that. We did launch a white paper in the market recently about that. We are ranked second overall in the market in the latest Investment Trends survey about our capabilities for the high-net-worth market. Demand is increasing there. Advisors are more and more focusing on higher balance customers. You've also got reg change occurring in that space as well. But we absolutely do empower Advisers with great solutions for the high-net-worth clients. We've got a broad range of investment options, including bonds, TDs, Direct FI, ESG investments.
Our market-leading managed portfolios are exceptional with delivering alpha in that space, or what we call execution alpha or platform alpha. We do have whole of wealth view and enhanced client reporting for assets both on and off platform and some innovative solutions that are helping with that intergenerational wealth transfer, high-net wealth back to the children and the family through SMSF Access and Discover and so forth. Of course, you'd be aware of our PARS business, which is non-custody or portfolio admin reporting service. We run for large brokers and wealth groups. We're actually, in terms of moving forward, coming to market with a slightly different offer, which is adding non-custody admin to our platform moving forward.
So round about March, we'll be having a phased rollout with some select wealth firms where we integrate custody, our great custody admin solution, not just with non-custody reporting as we do today, where you can do that and get a whole of wealth view, but with non-custody administration services as well, which will further enable the whole of wealth view, give comprehensive admin for off-platform assets and efficient corporate action management for transactions on and off platform. So watch this space heading in that direction to supplement the great capabilities we've got already in what is a growing market demand where we've got some great runs on the board. My final slide before we open to questions, sort of to say, in summary, we've got great market leadership. We've got great investment in our platform in terms of the future.
We're thinking about where we have to go to continue to disrupt the industry. We are gaining market share, as you can see from the stats, but with a long runway and a great latent opportunity to continue to excel and increase our market share moving forward. Having said that, our FUA guidance target that we launched in August remains the same, AUD 92 billion-AUD 100 billion by FY25, largely comprising a net flow organic range of AUD 10 billion-AUD 12 billion. This is a custody FUA guidance statement. We've got the opportunities for large migrations, having done the Insignia one and EQT on track. There's a range of market growth assumption there. So very confident that we'll hit in that range for FY25. Moving forward, we anticipate strong, profitable growth and maintaining market leadership by capitalizing on our great capabilities, as I mentioned in the strategy slide.
We've got a strong balance sheet supporting our investment profile, dividends and share buyback, highly scalable, diverse customer base, reliable revenue, both new and existing customers expected to keep driving that pipeline and that growth. We'll continue to invest in leadership for tomorrow and leverage the tech and data that we've got to great customer and industry outcomes. All in all, a bright outlook for HUB24. Thank you very much for listening to us talk about that. We'd love to open up for questions now. I'll hand back to our facilitator.
Thank you, Andrew and Kitrina, for the presentation. As Andrew mentioned, we are now opening the floor for questions. If you would like to ask a question, press star followed by the number one on your telephone keypad to raise your hand and enter the queue. When you are selected, if you are using a loudspeaker, kindly switch to your handset to ensure your question is heard clearly. To accommodate as many participants as possible, we request that you limit yourself to one question and one follow-up. If you do have additional questions, please re-enter the queue and we will address them as time permits. Again, that's star 1 to enter the queue. Your first question comes from the line of Nick McGarrigle from Barrenjoey. Your line is open.
Hi, team. Maybe just a question on how the year has started by the look of the market. It seems that you did kind of half the movement increase over the first 6.6 weeks was from lows and half was from market. But I just want to confirm that and what you're seeing in terms of trends around RFPs and further transitions getting you towards that 15-16. And then I've got another question after that.
In terms of the 15 to 16, we're very comfortable that the pipeline and the organic normal net flows are on track. Nick, can you add to that the Insignia number we had in the first half? We expect the EQT to transition to start in the next few weeks. There are three parties involved in that. We're well and truly ready and right to go. I was chatting with the CEO of EQT or Equity Trustees the other day. So we think we're fairly comfortable with that. We'll let you know if that changes and it's well advised. Kit, you might talk about the market movement and trend, but good inflows for the first six weeks of the year?
Yeah, absolutely. So as Andrew mentioned in the Pack, AUD 74.8 billion at 15th of February, so Thursday last week. And yeah, you're spot on, Nick. Roughly half of it is net flows and half of it is the market growth.
Cool. And then just another question from me around CapEx. It was relatively high in the first half at AUD 10.8 million. Just how we should think about that going forward. Were there any one-off projects in the CapEx number in the first half?
Yeah. So there isn't anything in there that's a one-off. The themes that are in the CapEx were obviously, you've got the platform CapEx, which was just under 7, which was AUD 6.9 million. And then the tech solutions broadly being the Class piece, which is AUD 4 million. On the platform side, you've got scalability and performance. You can see the flows continuing to grow, so we're continuing to build for the scale that we're seeing. We've got cyber that we're constantly increasing the capability for cyber. We've also got straight-through processing and automation in the operations world, which is driving productivity. So there isn't a one-off necessarily in there. But I would say there is always a bit of phasing between first half and second half. And it's not always a consistent year-on-year.
I would say that for full year 2024, yes, it will be up on 2023. It could be in the range of anywhere AUD 10 million-AUD 13 million, depending on how it goes in the second half.
Sorry, 10-13 in the second half alone?
No, sorry, 10-13 for the year.
Sorry. So you did 10.8 in the first half?
Sorry, just for the platform segment. Sorry, I was just talking the platform one there. So if you go from 6.9 in the first half, it'll be somewhere between 10-13 for the year, just in the platform segment. Class will be consistent, half on half and year- on- year.
Got it. Thanks.
Your next question comes from the line of Nick Burgess from Ord Minnett. Your line is open.
Yeah, morning, guys. Just a couple of questions first off, just on tech solutions. So overall growth in terms of revenue growth and super account growth is pretty modest. So two-part questions for this business overall. What's the key in terms of accelerating that growth? There's obviously product development going on in the background. Is there more product development needed? Do we need to be patient on the investment that's been made so far? First part of the question. Second part of the question, how should we think about the operating margin over the next couple of years given the current growth run rate of that business?
I might kick off. Absolutely, there is an investment there. We bought myprosperity. We've got Class. We're absolutely investing in and we've talked about it before in really robust infrastructure, cybersecure, data-sharing capabilities. The Class portfolio data is very a rich asset to us that we can help customers with. And so we are building that out. There was a decline in revenue from the HUBconnect brokerage clients, which we've said will happen over time. But we've been investing in that data infrastructure. It is supporting an adjacency, Nick. So in and of itself, the business is there to get some growth. But it is actually supporting the overall strategy and capability and supporting some of the platform of the future pieces and some of the awards we're winning. That's actually driven of some of the investment in that business. So yes, we've got more to do.
We've actually got plans to leverage that even further. We don't expect Class to grow phenomenally. We expect Class to grow in a consistent and stable way. But we expect to grow the overall pie by building better solutions and create competitive advantage with that. So a bit more time. But we have deliberately invested some we've moved some of the expense base to invest in strategy. And then we had a revenue decline. Is that fair, Kitrina?
I think that's fair. And I think, as Andrew said, I wouldn't expect in the short term material changes in the underlying EBITDA margin that you see come through that part of the business. Because we, one, will continue to invest in the HUBconnect data and technology stack that is driving advocacy on the platform and productivity for Advisers and the cost of advice. And then on the Class side, absolutely, we are looking at the investment in Class. And we're looking at delivering the strategy that was driving the acquisition of that part of the business.
So some of the costs are still there. As I said earlier, we're building the prototype for a Class portal, which is really the portal we have today is not fit for what we think you could deliver on an SMSF software business. So that's with myprosperity. So we're building that out, which will help make Class a better product in the marketplace and create the integration. We're starting to look at the Class portfolio data capability, which we talked about on acquisition. Whereas to date, we've been about stabilizing the business, getting it back to delighting its customers and building SMSF Access.
So there are some strategies in place that will come out, Nick, over time as well about how do we leverage that Class portfolio capability, which, if you like, could be seen as a tax engine that competes with other non-custodial services in the marketplace like Iress IPS and Praemium. So we're now turning our attention to those strategic capabilities, which all in all will help the group.
Okay. Thank you. That's helpful. And just a follow-up question. Not sure if it's related to your last couple of comments there. But the non-custody administration service that you're launching in March, is that just an investment in people to do the administration? Or is that a new take on either new or existing technology to support that service as well?
It's both. It will evolve over time. We do have non-custody admin services in market, as you know. This is attached to the platform. It's an additional feature in the platform. It's not a new service. If you have the platform, you can have some other assets. We currently lay a report on them. But we'll do some admin for you. We've got a staged launch, if you like, with select firms from March. We are going to market, obviously, building some tech and integration and people. But over time, that tech will evolve as well. There'll be ongoing development there as part of our platform build ongoing.
Thanks very much.
Thanks, Nick.
Your next question comes from the line of Simon Fitzgerald from Jefferies. Your line is open.
Hi there, Andrew. Just my first question is just in regards to the new relationships, both at the Adviser level and new Adviser practices. I was interested to know what you may be seeing in terms of custody that's currently off-platform that's forming part of those new relationships?
Custody of assets off-platform?
Yeah, correct.
Okay. So clearly, when we talk with those relationships, we understand what they tell us in terms of what they've got in the group. It's not publicly available information. So it's about the opportunities we chase. There is, if you take, we're number two with superannuation switching. A lot of those relationships will be picking up clients in different life stages who are typically industry fund clients. Hence, that's a part of the market that we tap into with that. But I don't have visibility of large pools of money, anecdotally sorry, mapped to each group depending on what they've told us. So there's always large transition opportunities. If you look at, hey, if our average balance per Adviser is AUD 17 million and others in the industry have far higher balances and we're talking to groups, there's a latent opportunity there.
Having the data is only if it's disclosed to us. I'm sorry, I wish I could tell you more. But we obviously look for the right opportunities with the right assets off our platform in other places.
Okay. That's fair. And then just a follow-up question in terms of the impact on revenue margins. Obviously, the EQT coming through is a large institutional set that will form part of the second half flows. Just wondering how we should be thinking about overall revenue margins.
Kit, do you want to take that one?
Yeah, happy to. So look, from a tiering and capping and an admin fee perspective, I've often said it could be anywhere between 0.5-1.5 basis points a year. And so this year, yes, I'd probably expect it to be somewhere between that 1-1.5 basis points on the admin fee compression for tiering. That also includes the PDS roll that we did in November and people moving to that new disclosed rate card. Obviously, it was a small impact on our portfolio. And that's included in the 1-1.5 basis points in admin fee compression and other callouts for the year. Then you've obviously got the cash balances. And towards the end of the year, the large migration coming in from EQT.
Now, EQT won't have a significant impact over the half because it broadly will be coming in towards the end of the year. It will all go through the institutional part of the revenue margin. Just when you're doing your modelling, it goes in that institutional piece. Then the cash, you would have seen looking across the industry that cash balances as a percentage of FUA have been lower. They've been lower for a little bit longer than they normally would be. It will all depend on where they land for the second half. I'm not sort of putting any stakes in the ground as to where that might land. That's just something that there'll be a range of assumptions that you'll need to use for where that cash balance sits for the second half.
Is the EQT margin, Kit, sorry, equivalent to the current institutional margin levels?
Yes, it is as a total portfolio for the institutional, yes.
Yeah. So it'll keep institutional on track. It's just the mix between institutional and retail may shift.
Yeah. Yeah. And that's the total custody margin, revenue margin.
Sorry, was that helpful?
Yes, thank you. Yes, thank you.
Your next question comes from the line of Brendan Carrig from Macquarie. Your line is open.
Good afternoon. Just maybe a follow-up on the margins. Kit, there's a slide that sort of shows the dollar value for admin fees up 4.8 and then cash and other up 9.1. Are you able to disaggregate that 9.1 a bit more specifically with the potential contribution from the trading or the transaction revenue given that I mean, it looks like it might have all been the uplift might have all been from trading given that admin fees were down 0.5 basis point. And obviously, trading was up. So I just wanted to maybe a bit more color on the contribution from trading.
We don't break out the trading and the cash. And so I won't be able to break it out for you so that you'll know more where that comes from. But the one thing that I would call out is that we obviously do also include myprosperity in the platform segment. And that's included in the non-custody in the other piece as well. So the platform operating revenue, the graph that you're referring to in the analyst and investor pack, that's just the custody piece. So it wouldn't include the non-custody and the myprosperity bit. But that 9.1 in that graph, I wouldn't break it out between trading and cash. But the trading has been high this six months is a way to think about it.
Okay. And then maybe just a follow-up from that. I think myprosperity, you've told us the EBITDA contribution. What was the revenue contribution from myprosperity in the half?
I haven't given it out. But if you use the at the front in the section where it talks about the group, the platform, and the tech solutions, you can see that the other part is 4% of the AUD 120 million. So just to tell you how to find it, if you go and have a look at the analyst pack and you look for the non-custody piece, clearly, the difference is going to be myprosperity. So roughly, half of that 4% is myprosperity and half is non-custody.
I thought you said you weren't telling me before.
Pretty easy to work it out from there. Yeah.
Okay. And then last one. Oh, sorry, maybe two quick ones. Just on the strategic investment, AUD 1 million, is that embedded into the cost base now that that's for the strategic investment in the tech solutions business? Or is that more of a one-off type cost?
It wouldn't be a one-off. So yes, it would be embedded in the cost. I mean, obviously, we will look for operating leverage and scalability to be able to offset it. But no, that cost is embedded in there.
And sorry, one more, if I might. Just on the buyback, the way that I read it in the slide, it sounds like you intend to complete the remaining, call it, AUD 40 million of that buyback. Is that correct? Or if the share price keeps going where it is and it's more advantageous to pay down debt or leave the money in cash, would that be an alternate option as well?
It's clearly an alternate option. But at the moment, we are committed to completing the share buyback. Part of the rationale for it was we obviously, when we do acquisitions and we did the myprosperity acquisition in May last year, we issue shares. And we're aware that that dilutes for long-term shareholders. So part of the rationale was to sort of help assist with some of that dilution. And people can participate in buying shares as we're buying them back on the market, participate in that or not. But you're all spot on that, look, as we work through the second half, if we thought that there was a better way to use the capital management, we're absolutely open to that.
Okay. Thank you.
Your next question comes from the line of Olivier Coulon from E&P Financial Group. Your line is open.
Hi, Kitrina. I know it's been asked a different way. But you did seem to flag that you thought cash balances across the industry were a bit lower. So is it fair to say the closing cash balance or current cash balance in the pooled funds is lower than the average through the first half?
Absolutely. So we normally say that the cash balances can be anywhere between let's call it 8 and 10. We have historically said it could be anywhere between 8 and 12. But it's been quite a while since it's been up at the 12. So anywhere between 8%-10%. Over the last, let's call it, three months or so, it has been below that 8%. Let's start.
Apologies for the interruption. We will place you on a slight music hold and rejoin the speaker line momentarily. Please stand by as we rejoin the speaker line. Thank you. Thank you for standing by. We now have our speaker line rejoined.
Sorry, I've only heard some sort of technical difficulty. I hope there are some people still there. Do we have any further questions, Paulie?
We do. We have a further question from Siraj Ahmed from Citigroup. Your line is open. Siraj, welcome. Sorry about that.
All good. Thanks. It's two questions. The first one, Andrew, on your comment with AUD 15-16 million of FUAs, that seems a bit low, right? I think you mentioned AUD 3-4 billion from Equity Trustees. You had AUD 1 billion from Insignia. So I'm just trying to understand why that is.
I'm happy for you to say it's a bit low. Absolutely. Me, I don't want to overpromise and have to correct that. Obviously, aspirationally, we'd like to do better than that. If possible, we do better than that. But if you do the math, if you take the first half organic flows and double it and add EQT and Insignia, you'll get well up into that number range. And if we do better in the second half organically, we could do better. You're quite correct. So my statement's not about dampening it. It's about saying it's about not overpromising.
Okay. Got it. So no reason why June quarter seasonality should not hold this year? Because I think Kitrina previously mentioned March quarter decides everything. And it seems like you've had a pretty good start. That's why I was a bit surprised.
It's just a theory, Siraj, that the third quarter will dictate what happens this year based on previous years. So if we do and that goes to the seasonality that we've had in Q4. The last two years, clearly, the seasonality has been unusual. That could be a number of things. Economic factors feed the consensus. So I think, obviously, the second half and depending how that seasonality goes will sort of dictate whether or not the second half organic net inflows that Andrew was talking about has a higher run rate than we saw in the first half.
We're yet to see how much incremental flow we get from Discover. Most of it appears to be clients we wouldn't have got previously as opposed to taking clients away from existing offices. But it's early days, Siraj. We don't know what's happening at a macro level. Yes, we're fairly bullish. The statement could be low.
Super. Thanks. Secondly, just on Kitrina, just on cost, I mean, at the 2Q update, you did say second half sequential cost should be lower. I just want to confirm that and how we should think about cost growth in second half and phasing. Thanks.
We tend not to give guidance on what the cost growth will be. But FTE is the clearest driver as to where the cost growth could grow. And so obviously, we're at 883 FTE as of 31st of December. The average FTE in the second half was higher than the spot growth because we did a lot of the hiring in the first quarter and then in the last quarter of last year. And so what I would say is that you'll see a much lower growth in FTE in second half. It could be ideally, obviously, half the growth that you saw in the first half is the way to think about it.
Okay. Just one more question if it's time. Andrew, if that's okay.
That's fine. And we will wrap up after this, folks. So I have some media to go to. But Siraj, off you go.
Yeah. Sure. Andrew, just in terms of this investment you're making in tech solutions, the AUD 1 million for data and everything like that, how do we think about this contributing in terms of the core custody or for the whole business, right? Clearly, making strategic investments, how does this translate in terms of revenue? Thanks.
Look, I think Twitter translates into further market share gains, market leadership. And it's an adjacency which will drive flow and advocacy for the platform. We're winning awards because of these things. Some of the Investment Trends awards are the interoperability and the integration we've got. So they're underpinning and/or supporting further growth. So our goal is to still generate more revenue from software and data businesses. Class is quite stable. It will grow incrementally. We are expecting to deliver more through HUBconnect licensing and others over time. But these investments are driven also to support the platform business. So can I isolate the revenue from the platform business as a result of the investments? Not easily. But as you can see, we've leapt ahead of others in terms of net flows. It's sensible. We're playing to demand. Give us some time. It will play out a bit further.
But we do aim to get the revenue and the profitability of that segment up over time.
Okay. Thank you.
That concludes the Q&A session. I'll now hand back to Andrew for closing remarks.
Thank you very much, everyone. Apologies for the technical glitch there. Hopefully, you can see it's been a great result. We've invested in the future. The numbers reflect that. Having said that, though, the position that HUB24 is in with the outlook, the pipeline, the awards, and that investment and the flow pattern we've had so far holds us in good stead moving ahead. Thank you for your support as shareholders or researchers. We look forward to speaking to you again shortly.
This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.